Why is "Tobacco the new currency of crime"?

  Niagara Falls, Ontario,
Tuesday, August 24, 2004
by: Joe Hueglin
  Why is "Tobacco the new currency of crime"?(1) Two and a quarter centuries ago the reason was stated by Adam Smith

"An injudicious tax offers a great temptation to smuggling." (2)

  In the 1990's "The raising of exorbitant taxes on cigarettes led to such an extent of smuggling that by the beginning of 1994 it was estimated that three out of every four cartons consumed in Quebec were illegal imports. Governments were accordingly forced to cut tobacco taxes in such a drastic manner that a pack of cigarettes immediately fell by 45 percent within one month." (3)
  Federal and Provincial Governments have chosen to increase taxes once again. Due to actions taken in the past decade smuggling is unable to meet the demand this has created. As a result robbery and hijacking are increasing. (4)
Rob Cunningham author of "Smoke and MirrorsThe Canadian Tobacco War", a book advertised on Health Canada's web site "TheFactsAboutTobacco" (5) in stating "If the cigarette thefts continue, there's a chance someone is going to get hurt."(6) is behind the times. Assaults and deaths have already occurred. (4)
Be the aim of ever higher taxes raising more revenue or reducing consumption this must be recognized: more and more incidents of robbery and hijacking and attendant violence is the price being paid.



Joe Hueglin

1.Cotroneo, Christian, Tobacco the new currency of crime, (pdf) August 7, 2004, Toronto Star
2. Smith, Adam, "Maxims" Volume II of "The Wealth of Nations". Book V, Chapter II, part II. 'Of Taxes'
3.The Minneapolis Federal Reserve Bank, Banking and Policy Issues Magazine "The Region"
4.Brewster, Murray, Spectacular tobacco heists catch the attention of organized crime: RCMP,August 17, 2004, The Recorder,
5.Health Canada, The Facts about tobacco, as seen on the web, August 24, 2004, Government of Canada
6.CTV news, Thieves pull of cigarette heist in Winnipeg, August 18, 2004, CTV News
Photo credits:    
Toronto Star and CTV


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